The British taxpayer is to underwrite a loan of £160 million to support a
Caribbean tax haven that is struggling to pay the salaries of its teachers,
nurses, doctors and police.

The decision to provide financial support for a country that levies no income
tax or capital gains tax, particularly during a period of severe austerity
at home, has brought criticism.

The Government admits that there is a “risk”, particularly about ensuring that
capital and interest repayments are made on time. But it believes it has a
“duty” to intervene. The Turks & Caicos Islands, which have
a population of